Perform a percentage change analysis. What does this tell you about the change in profitability and asset utilization?

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A percentage change analysis is the process of calculating the difference between two values expressed as a percent. In this case, it can be used to measure the change in profitability and asset utilization. For example, if a company’s profits increased from $200,000 to $250,000 over a period of time, then we can calculate the percentage change by subtracting 200,000 from 250,000 and dividing by 200,000 – resulting in 25% increase in profits. In regards to asset utilization, if the assets are utilized more efficiently or effectively then there would be an indication that profits have increased due to better asset utilization (i.e., higher productivity or efficiency). Therefore this percentage change analysis helps us understand how much profitability and/or assets have improved over time which provides valuable insight into a company’s performance.